Seattle B&B Can Remain Open for Business

Seattle.—After a long fight to vindicate their right to earn an honest living, Blayne and Julie McAferty can keep their Greenlake Guesthouse open for business. The McAfertys have ended their two-year old lawsuit against the City of Seattle, which recently dismissed a 2004 order requiring the McAfertys to cease operation of the bed and breakfast (B&B) or face steep fines.

The McAfertys hailed the outcome in their case: “We’re thrilled that we can remain open and serving the people and visitors of Seattle. This business has been our dream and our livelihood, and now it’s secure.”

The McAfertys’ ordeal began in 2004. Encouraged by a new ordinance allowing B&Bs in single-family, residential neighborhoods, the couple decided to pursue their dream of opening a B&B. They found a home with potential in Seattle’s Green Lake neighborhood, but realized it would need some work. Concerned about a provision in the new ordinance that prohibited “exterior structural alterations … made to accommodate [a] bed and breakfast,” they sought the city’s assurance that their plan to add two window dormers would be allowed. The city provided that assurance, explaining that the ordinance merely prohibited the addition of exterior structures, such as a parking structure, that would detract from the home’s residential character.

On that basis, the McAfertys bought the house and, with a city-issued remodeling permit, turned it into the Greenlake Guesthouse. They opened in August 2004, and business quickly boomed.

But the McAfertys’ excitement was short-lived. On November 2, 2004, the city issued a “Notice of Violation” ordering them to shut down or face fines of $75 per day. In a reversal of its earlier position, the city now maintained that the window dormers did violate the B&B ordinance. The McAfertys asked the city to reconsider the Notice of Violation, but the city upheld it in February 2005.

To protect their right to earn an honest living, the McAfertys filed a lawsuit against the city on March 1, 2005. Represented by the Institute for Justice Washington Chapter (IJ-WA), they challenged the ban on exterior alterations as an interference with their economic liberty.

Within days of the lawsuit, the city agreed to stay enforcement against the McAfertys and work toward a legislative solution. Councilman Richard Conlin, recognizing the important contributions small businesses make to the city and its residents, then spearheaded the effort to fix the B&B ordinance.

That effort culminated on August 14, 2006, when the city council passed a Conlin-sponsored bill eliminating the ban on exterior structural alterations and allowing B&B owners to make alterations consistent with the development standards of the underlying neighborhood. Mayor Greg Nickels signed the bill into law three days later.

While the new legislation eliminated a significant barrier to economic liberty, the issue of the McAfertys’ Notice of Violation remained. On February 14, 2007, as part of a settlement reached among the parties, the city formally dismissed the Notice of Violation, ensuring the Greenlake Guesthouse could remain open for business. With their right to earn an honest living secured, the McAfertys asked the court to dismiss their lawsuit, which it did on February 21. The dismissal was made public today.

IJ-WA staff attorney Michael Bindas noted that the result is something all sides could be proud of: “When the government respects an individual’s right to economic liberty, small businesses flourish, the city benefits from the great services entrepreneurs provide, and, in this case, the city’s visitors get a great place to stay. Let’s hope other governments across Washington get this message and encourage entrepreneurs in all fields rather than burden them with costly and counterproductive regulations.”